Mergers and acquisitions (M&A) is a general term involving the sale or purchase of a company. This term may also apply to transactions that involve the transfer of business assets or ownership. M&A is a specialized area of business law because there is a significant amount of legal requirements, liability, and paperwork involved in the sale or purchase of a business. Hoeg Law helps clients navigate through this complex process.
The Hoeg Law Firm has over a decade of experience working with individuals and companies in helping them manage various business transactions. This includes business owners selling their company, business investors, entrepreneurs selling equity to investors, an individual or company acquiring a business, and more.
We provide clients with a high level of legal expertise at a fraction of the cost that large firms charge. When working with Hoeg Law, you can expect large law firm caliber work with a personalized, small firm approach. If you or your company needs legal guidance with M&A, contact us for a free consultation today.
Considerations When Acquiring or Selling A Company
All good things must come to an end. Consequently, for a successful corporation or limited liability company, that end often takes the form of a merger or acquisition. Similar to other significant corporate transactions, mergers and acquisitions can take many forms. These forms range from stock sale to asset sale, from a reverse triangular merger, to something of the more plain vanilla variety.
Whether you are on the buying or selling side, a merger or acquisition will be a significant transaction for your company, with many things to consider. For example, questions may include:
- What should the sales price be?
- Should the company be sold in its entirety or the assets broken off and sold separately?
- What happens to the current employees?
- How will the current owners be paid?
- What should happen if the company underperforms?
- What if there’s an issue with the assets being conveyed?
- Are there contractual obligations owed by the company to a third party?
These are only a few key considerations when purchasing or selling a company. The lawyers at Hoeg Law have considerable experience dealing with this transitional process and can help with the acquisition or sale of a company.
Legal Aspects Involved In Mergers and Acquisitions
We provide several services related to M&A. These services include, but are not limited to the following:
Hoeg Law helps clients with the process of transaction due diligence in M&A deals. This includes parties on either the buying or selling side of the deal. Transaction diligence involves the investigation and verification of an investment opportunity.. When purchasing a business/making an investment, it’s important to first gather information and verify details for a multitude of reasons. Simply put, transactions that go through a due diligence process yield a much higher chance of success.
At Hoeg Law, a large part of our business involves providing business and strategic advice to founders and owners who have successful businesses but haven’t previously sold (or acquired) a company. For example, we provide advice on common issues involved with mergers and acquisitions, what they should/shouldn’t negotiate, etc. Overall, Hoeg Law has been down this road many times over the course of many years and has the experience to provide strategic advice to business owners involved in acquisitions.
Similar to employee/founder counseling, board counseling is focused on advising as to special fiduciary duties that a board holds to the shareholders and the company on the whole. Since mergers and acquisitions can be highly complex, it can often be helpful to have a lawyer in the room discussing such matters.
To effect a merger, acquisition, or any other significant corporate transaction, the action must be authorized by the board, the stockholders, or both. Drafting such resolutions is an important and complicated part of the process (merger resolutions can be 10 pages long). We help by drafting a legally sound resolution for these endeavors.
This type of contract lays out the agreement between the buyer of a company shares, and the seller. A stock purchase agreement protects both sides of the transaction.
An asset purchase agreements operates along the same lines as a stock purchase agreement. In this case, the contract details the agreement between the buyer of a company’s assets, and the seller.
Most acquisitions will require revisions, amendments, and restatements to the governing documents of the company. This can include revisions to equity and capitalization tables, name changes, and other items that hit the highest level governance documents of the company.
We help businesses with structure and governance. This includes the formation of a subsidiary company when necessary or desired.
Securities Law is enforced at the federal level in order to protect investors. On the other hand, each individual State has its own set of “Blue Sky” laws that are enforceable at the local/State level. In Michigan, these laws are referred to as the Michigan Uniform Securities Act. Hoeg Law helps Michigan small business owners ensure they’re compliant with these laws.
Section 409A of the Internal Revenue Code involves compensation that employees/contractors earn in a given year that’s not paid until a subsequent year. This is known as nonqualified deferred compensation. Hoeg Law helps small businesses by ensuring compliance with IRS Code 409A and various other state and federal regulations.
Whether you’re starting your first company or your fiftieth, there is always a lot to consider and keep track of. We can help with the legal formation of a corporation or limited liability company (LLC). This includes advising clients on which option is best for their business, as well as how best to organize after formation.
On the sales side, when owners are selling their company non-competition agreements are often a part of the deal so as to ensure that the seller cannot take the money and immediately turn around and compete against their former (now sold) company. As an experienced contract lawyer, Richard Hoeg is well versed in drafting a variety of legal business documents including non compete agreements.
In the video below, attorney Richard Hoeg provides insight on an acquisition between two large tech companies.
Talk To A Business M&A Expert Today
Hoeg Law has handled a multitude of mergers and acquisitions from term sheet to definitive documents, and everything in between. Whether you are seeking to sell your business and move on to greener pastures, or are looking to acquire someone else to continue your company’s upward expansion, we can help.
Our office is located in Northville, MI. Although this is the physical location of the firm, we take clients throughout the State of Michigan, and even throughout the United States. In fact, we can meet with clients in person or remotely, and work regularly with out-of-state clients. Therefore, if you’re looking for an experienced business acquisition attorney in Michigan, regardless of your location, we can work with you or your company. Call and schedule a free consultation with an M&A expert today. (734) 263-1001